If a shortfall occurs in a security due to a securities finance enterprise's operation of margin purchase and short sale business, securities lending business and refinancing business (hereinafter, "shortfall in securities in margin and short trading"), or, if the securities finance enterprise is engaged by a securities firm to handle on its behalf any open position that still remains after sell-first buy-later day trading (hereinafter, "shortfall in securities in day trading"), the securities finance enterprise shall initiate a competitive bid loan from the following lenders as from 9 am on the next business day, and if a shortfall still exists, shall arrange for negotiated transaction with any specified persons no later than 2 pm on that day.
With the exception of a shortfall in securities in day trading, if the shares of the given security obtained following the procedures described in the preceding paragraph are still insufficient in amount, the securities finance enterprise shall engage a securities firm to conduct a purchase of shares by reverse auction at the TWSE by 2:30 pm on the same day.
- owners of that type of securities
- securities firms or securities finance enterprises operating securities lending business or margin purchase and short sale business
Any borrowing of securities through competitive bid and negotiated transaction and any purchasing of securities by reverse auction under the preceding two paragraphs shall be suspended for a given security on the second business day preceding the first day of a book closure, except when book closure occurs due to the convening of a special shareholders meeting by the issuer or for reasons that do not affect the exercise of shareholder rights.
The calculation of the business day referred to in the preceding paragraph shall be in accordance with Article 76 of the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities.